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A RESEARCH PROPOSAL FOR MANAGEMENT RESEARCH PROJECT-II ON “AWARENESS & USE OF CREDIT RATINGS IN INVESTMENTS” Submitted By: Name Ninad Kamle

Mistry Pratik Jaimil Shah Yash Shah Roll No. 14 19 55 56

M.B.A. Semester-IV Under the Guidance of: Prof. (Dr) Mahendra Sharma, Prof. & Head, V. M. Patel Institute of Management Prof. Shital Badshah, Asst. Professor Prof. Harsha Jariwala, Lecturer, A.M.Patel Institute of Computer Studies. Submitted To: A.M.Patel Institute of Computer Studies, Ganpat University, Kherva.

January, 2012

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(CRISIL) 2 . regulatory and supervisory regime for CRAs. PFRDA and RBI) predominantly use the ratings. By facilitating investment decisions they can help investors in achieving a balance in the risk return profile and at the same time assist firms in accessing capital at low cost. it was felt necessary to institute a comprehensive review of the registration. Strategic Management Tools to be used to study for analysis: Strategic Management tools apply as per the requirement 4.  To analyze the impact of Credit Rating.  To know who are the major player of Credit Rating Agency.  To identify the market share of fertilizer industry. in view of the fact that CRAs that rate capital market instruments are regulated by SEBI and that entities regulated by other regulators (IRDA. Objective of the Study:  To identify the current scenario of the Credit Rating. Rational behind selection of Credit Rating: Credit rating agencies play an important role in assessing risk and its location and distribution in the financial system.  To analyze the success and growth of Credit Rating. 3.1. However. Major Players of the CRAs: Top Credit Rating Agencies in India: • Credit Rating and Information Services of India Ltd. 2. CRAs can thus potentially help to allocate capital efficiently across all sectors of the economy by pricing risk appropriately.

• Investment Information and Credit Rating Agency of India Limited (IICRA India) • Credit Analysis and Research Limited (CARE) • Onida Individual Credit Rating Agency (ONICRA) • Fitch India • Brickworks 3 .

Commercial paper 3. CRAs use their understanding of companies‘ business and operations and their expertise in building frameworks for relative evaluation. Primary data collection 2. Ask the problem that people face while setting up new investment. Fixed deposits and bank certificate of deposits 6.• Rating related products and activities:CRAs in India rate a large number of financial products: 1. The Telephonic talk is the best way to ask their problem and other relevant problem which is face by them. 5. Structured finance products 4. Secondary data collection 1. 1. For example developer gradings are carried out to assess the ability of the developers to execute projects on a timely basis and promised quality while maritime institute gradings are carried out to assess quality of education imparted to the students vis a vis DGS (Directorate General of Shipping) objectives. Initial Public Offers (IPOs) CRAs also undertake customised credit research of a number of borrowers in a credit portfolio. Bonds/ debentures. PRIMARY DATA The primary data is that data which is collected fresh or first hand. Mutual fund debt schemes 7. Go to the people filled up questionnaire to get preliminary data. and for first time which is original in nature. which are then applied to arrive at performance grading.[the main product] 2. for the use of the lender. Sources of Data Collection: There are two types of data collection methods available. Ask people orally. 4 . Bank loans 5.

Secondary data easily get those secondary data from records.com  www. liquidity risk. etc.2. unless otherwise specified. • Not a general-purpose credit or performance evaluation of the rated entity. It will save the time. in the words of the CRAs.in  http://www. taxation aspects. 6. pre-payment risk.google. money and efforts to collect the data. The rating is usually specific to the instrument and is not the rating of the issuer. or derivatives thereof. is: • Not a recommendation to buy. 7. annual reports of the company etc. books etc. A rating is one of the many inputs that is used by investors to make an investment decision.org. Secondary data also made available through trade magazines. interest rate risk. Limitations of credit ratings Specifically. a credit rating.com  http://rbidocs. bonds.economywatch.capitaline. • Not Intended to measure many other factors that debt investors must consider in relation to risk . hold or sell any shares. debentures or other instruments issued by the rated entity.com 5 .such as yield offered. balance sheets.rbi. exchange loss risk. Bibliography:  www. journals. risk of secondary market loss. SECONDARY DATA COLLECTION METHOD The secondary data are those which have already collected and stored.